<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE PERIOD ENDED JUNE 30, 1997
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD
FROM ________________ TO ________________
Commission File Number: 1-13042
RIDE, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Washington 91-1571027
- ------------------------------------ ---------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) No.)
8160 304th Avenue Southeast
Preston, Washington 98050
- ------------------------------------ ---------------------------------
(Address of principal executive (Zip Code)
offices)
(425) 222-6015
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1933 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------ ------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
Common Stock, without par value -- 11,668,947 as of August 1, 1997
<PAGE> 2
INDEX
RIDE, INC.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed consolidated balance sheets -- June 30, 1997 and December 31,
1996
Condensed consolidated statements of operations -- Three and six month
periods ended June 30, 1997 and 1996
Condensed consolidated statements of cash flows -- Three and six month
periods ended June 30, 1997 and 1996
Notes to condensed consolidated financial statements -- June 30, 1997
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
1
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
RIDE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
June 30,
1997 December 31,
(Unaudited) 1996
----------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 2,742 $ 3,232
Receivables, less allowance for doubtful accounts of
$592 at June 30, 1997 and $655 at
December 31, 1996 6,339 14,193
Inventories 10,111 5,986
Prepaid expenses and other current assets 872 450
Income taxes receivable 4,368 2,836
Deferred tax assets 1,423 1,423
----------- -----------
Total current assets 25,855 28,120
Plant and equipment, net of accumulated depreciation 5,923 5,757
Notes receivable, net of discount 1,962 1,884
Goodwill, net of accumulated amortization 16,322 14,292
Other assets 666 602
=========== ===========
Total assets $ 50,728 $ 50,655
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,906 $ 4,631
Accrued expenses and other current liabilities 2,000 2,776
Short-term borrowings 6,305 --
----------- -----------
Total current liabilities 10,211 7,407
Long-term debt, less current portion 555 604
Deferred income taxes 335 335
Shareholders' equity:
Preferred stock 500 500
Common stock 41,347 39,583
Retained earnings (deficit) (2,220) 2,226
----------- -----------
Total shareholders' equity 39,627 42,309
=========== ===========
Total liabilities and shareholders' equity $ 50,728 $ 50,655
=========== ===========
</TABLE>
See accompanying notes
2
<PAGE> 4
RIDE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Three months Six months ended
ended June 30, June 30,
-------------------------- --------------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net sales $ 2,525 $ 13,501 $ 7,559 $ 26,278
Cost of goods sold 1,861 9,337 5,567 18,727
---------- ---------- ---------- ----------
Gross profit 664 4,164 1,992 7,551
Selling, general and administrative
expenses 3,683 3,596 8,392 8,671
---------- ---------- ---------- ----------
Operating income (loss) (3,019) 568 (6,400) (1,120)
Interest income 45 83 103 277
Interest expense (31) (7) (43) (26)
---------- ---------- ---------- ----------
Income (loss) before income taxes (3,005) 644 (6,340) (869)
Income tax expense (benefit) (751) 233 (1,904) (298)
---------- ---------- ---------- ----------
Net income (loss) $ (2,254) $ 411 $ (4,436) $ (571)
========== ========== ========== ==========
Net income (loss) per share:
Primary $ (0.21) $ 0.04 $ (0.41) $ (0.06)
Fully diluted $ (0.21) $ 0.04 $ (0.41) $ (0.06)
Weighted average common shares outstanding:
Primary 10,879 11,222 10,826 10,538
Fully diluted 10,879 11,422 10,826 10,538
</TABLE>
See accompanying notes
3
<PAGE> 5
RIDE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
Six months ended June 30,
--------------------------
1997 1996
---------- ----------
<S> <C> <C>
Net cash used in operating activities $ (5,254) $ (12,964)
INVESTING ACTIVITIES:
Acquisition of net assets of Device Mfg Corp (1,221) --
Purchase of plant and equipment (588) (3,323)
Sale of securities available for sale -- 3,840
Other (12) (383)
---------- ----------
Net cash provided by (used in) investing
activities (1,821) 134
FINANCING ACTIVITIES:
Proceeds from short-term borrowings 6,305 --
Proceeds from exercise of Common Stock options 319 358
Proceeds from Employee Stock Purchase Plan 28 62
Repayment of notes payable -- (938)
Proceeds from long-term debt -- 675
Repayment of long-term debt (49) (9)
Dividends paid (18) (18)
---------- ----------
Net cash provided by financing activities 6,585 130
---------- ----------
Net decrease in cash and cash equivalents (490) (12,700)
Cash and cash equivalents at beginning of period 3,232 14,271
========== ==========
Cash and cash equivalents at end of period $ 2,742 $ 1,571
========== ==========
SUPPLEMENTAL DISCLOSURE:
Cash paid (received) for income taxes $ (372) $ 343
Cash paid for interest $ 43 $ 38
NONCASH FINANCING ACTIVITY:
Common stock issued in acquisition of net assets of
Device Mfg Corp $ 1,425 --
Preferred stock dividends declared but not paid $ 9 $ 9
Tax benefit of stock option exercises -- $ 79
</TABLE>
See accompanying notes
4
<PAGE> 6
RIDE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1997
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared by Ride, Inc. (the "Company"), in accordance with generally accepted
accounting principles for interim financial statements and with the instructions
to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include
all of the information and disclosures required by generally accepted accounting
principles for complete financial statements. In the opinion of the Company's
management, all adjustments (consisting of normal recurring accruals) necessary
for a fair presentation have been included. The Company's revenues are highly
seasonal, occurring primarily between June and December as its products are
shipped to customers. The results of operations for the three and six month
periods ended June 30, 1997, therefore may not be indicative of the results for
the full fiscal year. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Company's annual
report on Form 10-K for the year ended December 31, 1996. All amounts are stated
in US dollars.
2. NET INCOME (LOSS) PER SHARE
Primary net income per share has been computed by dividing net income, after
reduction for Preferred Stock dividends, by the weighted average number of
common shares and equivalents outstanding. Common share equivalents included in
the computation represent shares issuable upon assumed exercise of stock options
and warrants having exercise prices below the average market price of the Common
Stock using the treasury stock method. Fully diluted net income per share has
been computed by dividing net income by the weighted average number of common
shares and equivalents outstanding assuming the conversion of convertible
Preferred Stock occurred at the beginning of the period. The number of common
share equivalents included in the fully diluted computations represent shares
issuable upon exercise of stock options and warrants having exercise prices
below the higher of the average or the ending market price of the Common Stock
using the treasury stock method. Net loss per share has been computed by
dividing the net loss, after reduction for Preferred Stock dividends, by the
weighted average number of common shares outstanding. Common equivalent shares
are excluded from the net loss per share computations because their effects are
antidilutive.
3. INVENTORIES
Inventories consisted of the following:
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
-----------------------------
(In thousands)
<S> <C> <C>
Finished goods $ 10,176 $ 9,415
Raw materials and work in process 3,069 2,487
Obsolescence reserve (3,134) (5,916)
----------- -----------
$ 10,111 $ 5,986
=========== ===========
</TABLE>
5
<PAGE> 7
RIDE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
4. LINE OF CREDIT
In July 1997, the Company renewed its revolving credit facility with a bank. The
facility expires June 30, 1998 and provides for import letters of credit and
direct advances for working capital. Through October 30, 1997, the maximum
amount available under the line is $15 million. The maximum amount available
thereafter fluctuates based on the seasonality of the Company's cash flows but
is never less than $2 million. Advances on the line bear interest at the bank's
prime rate. The facility has certain operating covenants, including financial
ratios, working capital restrictions and restrictions on payment of dividends on
the Company's Common Stock.
5. FOREIGN CURRENCY TRANSACTIONS
The Company enters into foreign currency forward contracts to hedge firm
purchase and sales orders denominated in foreign currencies. At June 30, 1997,
the Company had open positions to purchase 2.0 million Deutsche Marks for
approximately $1.3 million which mature through September 1997. The net loss on
these forward contracts as of June 30, 1997 of approximately $149,000 has been
deferred and will be recognized when the related commitments are settled.
6. ACQUISITION
On June 12, 1997, the Company purchased substantially all of the assets (except
cash and accounts receivable) and liabilities of Device Mfg Corp, a manufacturer
of step-in snowboard bindings and boots based in Boulder, Colorado. The purchase
price was comprised of approximately $1.0 million in assumed liabilities and
514,382 shares of Common Stock. Of the shares issued, 257,191 are subject to
forfeiture should 1997 Device product sales fail to meet certain targeted
amounts. The acquisition has been accounted for using the purchase method.
7. SUBSEQUENT EVENT
On July 22, 1997, the Company purchased substantially all of the assets of
Galena Creek Trading Company, Inc. (d.b.a. Smiley Hats), a manufacturer of
winter hats based in Sparks, Nevada. The purchase price was comprised of
approximately $550,000 in cash and 320,000 shares of Common Stock. Galena Creek
Trading Company is majority owned and controlled by the Company's Chief
Executive Officer. A valuation opinion from an investment banking company was
obtained in connection with this transaction. The acquisition will be accounted
for using the purchase method.
6
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
To the extent that this Quarterly Report on Form 10-Q discusses financial
projections, information or expectations about the Company's products or
markets, or otherwise makes statements about the future, such statements are
forward looking and are subject to a number of risks and uncertainties that
could cause actual results to differ materially from the statements made. These
factors include the competitive environment, industry and product
concentrations, dependence on third-party selling efforts and other risks
outlined in more detail in the Company's Annual Report on Form 10-K as filed
with the Securities and Exchange Commission for the fiscal year ended December
31, 1996. Certain forward looking statements contained in the following
discussion are more specifically identified with the symbol (*).
GENERAL
The Company is a leading designer, manufacturer and marketer of snowboards and
related products through its subsidiaries: Ride Snowboard Company ("Ride
Snowboards"), Ride Manufacturing, Inc. ("Ride Manufacturing," formerly known as
Thermal Snowboards, Inc.), Ride Canada, Inc. ("Ride Canada") and SMP Clothing,
Inc. ("SMP"). The Company was founded in September 1992 and acquired Ride
Manufacturing in September 1995 and SMP in October 1995. Finally, the Company
acquired C.A.S. Sports International, Inc. and C.A.S. Sports Agency, Inc.
(collectively, "CAS") in August 1994. On October 11, 1996, the Company sold the
CAS entities and the related excess inventory and brokered-OEM businesses. The
results of operations of the CAS excess inventory and brokered-OEM businesses
are included in the Company's financial statements through the date those
businesses were sold.
The Company's operations vary significantly during the year based on the winter
sports season. The season for winter sports, which includes snowboarding,
typically runs from November through March in northern hemisphere markets.
Accordingly, the Company generates the majority of its sales in the third and
fourth quarters, as snowboard retailers time their purchases to meet expected
retail demand.* Because relatively lower net sales are generated in the first
and second quarters of the year, the Company expects to incur operating losses
in the first half of the year.*
Historically, there is a backlog of orders beginning in March of each year as a
result of pre-season orders placed in connection with winter sports trade shows.
The backlog decreases beginning in late summer and is usually insignificant by
the end of the year.* Backlog in the snowboarding industry is subject to delay
or cancellation.* The Company's backlog of orders as of June 15, 1997 was
approximately $26 million*, compared to a backlog of $56 million as of April
1996. The 1996 backlog total included approximately $8 million in orders from
the CAS excess inventory and brokered-OEM businesses sold in October 1996. The
majority of the decline in order backlog was attributable to the Japanese market
which is experiencing significant excess inventory conditions. Orders were also
lower in Europe and North America as dealers have reduced their pre-season
bookings as a result of excess inventories.
RESULTS OF OPERATIONS
QUARTER ENDED JUNE 30, 1997 COMPARED WITH QUARTER ENDED JUNE 30, 1996
Net sales in the second quarter of 1997 were $2.5 million compared to $13.5
million in the second quarter of 1996. Approximately $4.4 million of the 1996
amount was generated by the CAS excess inventory and brokered-OEM businesses
sold in October 1996. The remaining difference was due primarily to second
quarter 1996 shipments to one of the Company's Japanese distributors not
recurring in the 1997 period. During the first quarter of 1997, the Company
reduced the number of its distributors in Japan from four to three and began
selling "Ride," "Liquid" and "Preston" branded products directly to key
retailers in Japan. The Company expects that this change in distribution
channels will result in a higher percentage of sales to Japan, on a relative
basis, occurring in the second half of the year than in prior years.*
7
<PAGE> 9
Hard goods (defined as snowboards, bindings, boots and skateboards) represented
52% of second quarter 1997 net sales while soft goods (apparel and accessories)
made up 48%. For the second quarter of 1996, hard goods comprised 83% of sales
and soft goods 17%. The relative decrease in hard goods sales is attributable
primarily the fact that the sold CAS businesses were predominantly hard goods
oriented. For the second quarter of 1997, sales in North America made up 60% of
total sales with international sales comprising the remaining 40%. For the
second quarter of 1996, North America comprised 39% of total sales and
international 61%. The decrease in international sales is attributable to the
change in distribution channels in Japan as well as the excess inventory
situation in that market.
Gross margins for the three months ended June 30, 1997 were 26.3% compared to
30.8% for the same period in 1996. Gross margins were negatively impacted by the
lower volume of current season products shipped to the Japanese market due to
the Company's change in its distribution strategy in that market. In addition,
approximately 28% of second quarter 1997 sales were comprised of lower margin
1996 close out products.
Selling, general and administrative expenses were $3.7 million for the second
quarter of 1997 compared to $3.6 million in the second quarter of 1996. This
change was due to increased depreciation, rent and legal expenses, offset partly
by the disposition of the CAS businesses, lower executive salaries and lower
variable expenses (primarily commissions and bad debt accruals) associated with
the lower sales volumes.
Interest income was $45,000 in the second quarter of 1997 compared with $83,000
for the second quarter of 1996. The decrease was due to lower invested cash
balances in the second quarter of 1997 as compared to the same period in 1996
due to capital supplied by the Company's August 1995 public stock offering.
Interest expense in the second quarter of 1997 of $31,000 was due primarily to
direct advances on the Company's revolving credit facility during the period.
The effective tax rate for the second quarter of 1997 was 25.0% compared with
36.2% for the second quarter of 1996. The lower rate is due primarily to the
disposition of the CAS businesses which were based principally in Canada and had
a higher overall income tax rate and the establishment of a valuation allowance
on the Company's net operating loss carryforwards. The Company expects the
effective tax rate for the full year to be approximately 25%.*
SIX MONTHS ENDED JUNE 30, 1997 COMPARED WITH SIX MONTHS ENDED JUNE 30, 1996
Net sales in the first six months of 1997 were $7.6 million compared to $26.3
million in the first six months of 1996. Approximately $7.5 million of the 1996
amount was generated by the CAS excess inventory and brokered-OEM businesses
sold in October 1996. The remaining difference was due primarily to shipments in
the first six months to one of the Company's Japanese distributors not recurring
in the 1997 period.
Hard goods represented 50% of net sales in the first six months of 1997 while
soft goods made up 50%. For the first six months of 1996, hard goods comprised
85% of sales and soft goods 15%. The relative increase in soft goods sales is
attributable primarily to growth in Spring season sales at the Company's SMP
subsidiary coupled with the fact that the sold CAS businesses were predominantly
hard goods oriented. For the first six months of 1997 and 1996, respectively,
sales in North America made up 68% and 42% of total sales with international
sales comprising the remaining 32% and 58%. The decrease in international sales
is attributable to the change in distribution in Japan as well as the excess
inventory situation in that market.
Gross margins for the six months ended June 30, 1997 were 26.3% compared to
28.7% for the same period in 1996. Gross margins were negatively impacted by the
lower volume of current season products shipped to the Japanese market. In
addition, approximately 42% of first half 1997 sales were comprised of lower
margin 1996 close out products.
8
<PAGE> 10
Selling, general and administrative expenses for the first six months of 1997
decreased to $8.4 million from $8.7 million in the first six months of 1996.
This decrease was due to the disposition of the CAS businesses and lower
executive salaries offset by increased depreciation, rent and legal expenses.
Interest income totaled $103,000 in the first six months of 1997 compared with
$277,000 for the same period in 1996. The decrease was due to overall lower
invested cash balances in the first six months of 1997 as compared to the same
period in 1996 due to capital supplied by the Company's August 1995 public stock
offering. Interest expense in the first half of 1997 of $43,000 was due
primarily to direct advances on the Company's revolving credit facility during
the period. Interest expense of $26,000 in the first half of 1996 included
interest paid on notes payable issued in connection with the SMP acquisition
which were repaid April 1996.
The effective tax rate for the first six months of 1997 was 30.0% compared with
34.3% for the second quarter of 1996. The lower rate is due primarily to the
disposition of the CAS businesses which were based principally in Canada and had
a higher overall income tax rate and the establishment of a valuation allowance
on the Company's net operating loss carryforwards.
LIQUIDITY AND CAPITAL RESOURCES
During the second quarter of 1997 and 1996, the Company financed its operations
primarily through cash balances on hand, collection of year-end receivables and
the Company's line of credit facility. Net cash used in operating activities
totaled approximately $5.3 million in the first six months of 1997 compared with
$13.0 million in the comparable period of 1996. This decrease was due to
primarily to a smaller inventory buildup in 1997 than in 1996 and lower accounts
receivable due to the reduction in net sales. Net cash used in investing
activities totaled $1.8 million during the first six months of 1997 compared to
net cash provided by investing activities of $134,000 in the first six months of
1996. The 1997 period includes approximately $1.2 million related to the
purchase of the net assets of Device Mfg Corp. and approximately $588,000 in
capital expenditures. The 1996 period includes approximately $3.8 million in
proceeds from the sale of short term investments, offset by capital expenditures
of approximately $3.3 million. A significant portion of the capital expenditures
acquired in the first six months of both 1997 and 1996 are associated with molds
and tooling for snowboards and snowboard bindings. Capital expenditures in the
1996 period also included leasehold improvements related to the expansion of the
Company's Preston, Washington office and warehouse facilities. Net cash provided
by financing activities totaled $6.6 million in the first six months of 1997
compared with $130,000 in the comparable period of 1996. The 1997 period
includes direct advances on the Company's line of credit of approximately $6.3
million.
The Company has a revolving line of credit arrangement with a bank to finance
import letters of credit and working capital needs. Through October 30, 1997,
the maximum amount available under the line is $15 million. The maximum amount
available thereafter fluctuates based on the seasonality of the Company's cash
flows but is never less than $2 million. Advances on the line bear interest at
the bank's prime rate. At July 31, 1997, the Company had approximately $6.9
million in outstanding import letters of credit and direct advances of $6.3
million drawn against this line. The line of credit expires on June 30, 1998 and
has certain operating covenants, including financial ratios, working capital
restrictions and restrictions on payment of dividends on the Company's Common
Stock.
Certain of the Company's purchase commitments and sales are denominated in
foreign currencies. Because a change in the value of such currencies relative to
the U.S. dollar will affect the Company's gross profit and net income, the
Company enters into forward currency contracts to hedge against adverse currency
fluctuations. Although the Company believes that these contracts decrease the
overall exposure to gains and losses from currency fluctuations, such exposure
cannot be entirely eliminated.*
9
<PAGE> 11
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In 1996, the Company's Preston Binding Company subsidiary initiated legal
proceedings against Switch Manufacturing, alleging infringement by Switch of
certain Preston-owned patented binding technologies. In answer to the lawsuit,
Switch counterclaimed, alleging misuse of patent and unfair business practices
by the Company. In April 1997, the Company filed a motion to dismiss Switch's
counterclaims and certain affirmative defenses. On July 28, 1997, the Court
granted the Company's motion to dismiss Switch's counterclaims and certain
affirmative defenses and directed Switch to file an amended answer no later than
August 27, 1997. The case is pending in the United States District Court for the
Northern District of California as Raines, et al. v. Switch Manufacturing v.
Ride, Inc., Civil Action No. C96-2648-DLJ.
Also in 1996, the Company initiated legal proceedings against Wide Ride, Inc. in
Federal District Court for the District of Colorado, styled Ride Snowboard
Company v. Wide Ride, Inc., Civil Action No. 96-D-2003. The suit alleges
infringement of the Company's registered "Ride" trademark by Wide Ride.
On March 14, 1997, a shareholder filed a lawsuit against the Company and four of
its current or former officers and directors in the United States District Court
for the Western District of Washington at Seattle, styled Murray v. Ride, Inc.
et al., Civil Action No. C97-0402Z. A second lawsuit was filed against the same
parties on April 9, 1997 by two shareholders in the same court under Taylor et
al. v. Ride, Inc. et al., Civil Action No. C97-560Z. Identical except for the
named plaintiffs and facts specific to each, the lawsuits allege violations of
certain federal securities laws and state laws, and purport to seek damages on
behalf of a class of shareholders who purchased the Company's common stock
during the period August 10, 1995 through December 30, 1996. The Company
believes the lawsuits are without merit and intends to vigorously defend against
the claims.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company's Annual Meeting of Shareholders was held on May 5,
1997. The following members were elected to the Company's Board of Directors to
hold office for the ensuing year.
<TABLE>
<CAPTION>
Nominee For Withheld
------- --- --------
<S> <C> <C>
Robert E. Hall 9,365,643 90,605
Cory J. Hechler 9,358,144 98,104
Mark M. Salter 9,338,225 118,023
Gerald B. Wasserman 9,365,983 90,265
</TABLE>
The proposal to ratify Ernst & Young LLP as the Company's independent public
accountants for the fiscal year ending December 31, 1997 was approved as
follows:
<TABLE>
<CAPTION>
In Favor Opposed Withheld
-------- ------- --------
<S> <C> <C>
9,408,151 23,178 24,919
</TABLE>
10
<PAGE> 12
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
3.1 Restated Articles of Incorporation and Certificate of
Designation of Relative Rights and Preferences of the Series A
7% Cumulative Nonvoting Preferred Stock (1)
3.2 Bylaws of the Company (1)
3.3 Articles of Amendment to Articles of Incorporation (9)
3.4 Articles of Amendment to Articles of Incorporation (10)
3.5 Articles of Correction (12)
4.1 Article VI of the Articles of Incorporation regarding
Shareholder Rights (See Exhibit 3.1) (1)
4.2 Article VIII of the Articles of Incorporation regarding Voting
Rights (See Exhibit 3.1) (1)
4.4 Specimen Stock Certificate (2)
10.10 Exclusive Distributorship Agreement dated December 7, 1992, by
and between Ride Snowboard Company and Far East Trading Co.,
Ltd.(3)
10.24 Exchange Agreement, dated December 31, 1993, between Ride
Snowboard Company and Mark M. Salter (1)
10.25 Employment Agreement, dated August 18, 1994, by and between
Ride Snowboard Company and James J. Salter (4)
10.26 Form of Employment Agreement between Ride Snowboard Company and
Roger B. Madison, Jr. (1)
10.27 Employment Agreement, dated January 1, 1995, by and between
Ride Snowboard Company and Timothy G. Pogue (7)
10.28 Form of Ride Snowboard Company 1994 Stock Option Plan (1)
10.29 Form of Ride Snowboard Company 1994 Directors' Nonqualified
Stock Option Plan (1)
10.30 Lease Agreement with Teachers Insurance & Annuity Association
dated January 10, 1994 (1)
10.32 Amended Form of Underwriting Agreement (5)
10.34 Standard Form Multiple Occupancy Lease, dated November 29,
1994, by and between Ride Snowboard Company and BDC Preston
Properties One Limited Partnership (6)
10.35 Business Loan Agreement, dated June 10, 1996, by and between
Ride, Inc. and U.S. Bank of Washington, N.A. (21)
10.36 Stock Purchase Agreement, dated August 18, 1994, between Ride
Snowboard
</TABLE>
11
<PAGE> 13
<TABLE>
<S> <C>
Company and James J. Salter, the James Salter Family Trust,
Kenneth Finkelstein Family Trust, The Snow Trust, Robert
Marcovitch, Kerry Wasserman, Rick Clarfield, Howard Cohen, Gary
Kell, Sandra Pelegrin, Alan Langer, Dan Opyc, C.A.S. Sports
International, Inc. and C.A.S. Sports Agency, Inc. (8)
10.45 Ride Snowboard Company 1995 Employee Stock Purchase Plan (9)
10.46 Ride Snowboard Company 1995 Foreign Subsidiary Employee Stock
Purchase Plan (9)
10.47* Exclusive OEM Agreement, dated July 26, 1995, by and between
Ride Snowboard Company and Straight Line Water Sports,
Inc.(11)
10.48 Employment Agreement, dated September 1, 1995, between the
Company and David A. Janes, Jr. (13)
10.49 Employment Agreement, dated September 1, 1995, between the
Company and Bernard Gervasoni (13)
10.50 Employment Agreement, dated October 19, 1995, between the
Company and David Milo Myers (14)
10.51 Registration Rights Agreement dated October 19, 1995, between
the Company and David Milo Myers, Lawrence Kraus and Michael
Wise (14)
10.52 Stock Purchase Agreement, dated September 1, 1995, between the
Company and the shareholders and option holders of 5150
Snowboards, Inc. and Thermal Snowboards, Inc. (15)
10.53 Asset Purchase Agreement, dated October 19, 1995, among the
Company, Sex Money Power Clothing, Inc., David Milo Myers,
Lawrence Kraus and Michael Wise (16)
10.54 Form of Underwriting Agreement by and between the Company and
Hambrecht & Quist LLC and Dain Bosworth Incorporated (17)
10.55* Amendment No.1 to Exclusive Distributorship Agreement, dated
October 24, 1995, by and between Ride Snowboard Company, 5150
Snowboards, Inc., SMP Clothing, Inc. and Far East Trading
Company Ltd. (18)
10.56 Employment Agreement, dated October 14, 1995, by and between
the Company and Kenneth J. Finkelstein (19)
10.57 Employment Agreement, dated January 1, 1996, by and between
C.A.S. Sports International, Inc. and Robert F. Marcovitch (19)
10.58 First Amendment, dated August 4, 1995, to Lease Agreement by
and between Ride Snowboard Company and BDC Preston Properties
One Limited Partnership (19)
10.59 Second Amendment, dated November 21, 1995, to Lease Agreement
by and between Ride Snowboard Company and BDC Preston
Properties One Limited Partnership (19)
10.60 Third Amendment, dated March 26, 1996, to Lease Agreement by
and between Ride Snowboard Company and BDC Preston Properties
One Limited Partnership (19)
10.61 Amendment No. 2 to Exclusive Distributorship Agreement, dated
October 24, 1995, by and between Ride Snowboard Company, 5150
Snowboards, Inc., SMP Clothing, Inc. and Far East Trading
Company Ltd. (20)
</TABLE>
12
<PAGE> 14
<TABLE>
<S> <C>
10.63 Agreement, dated May 7, 1996, by and between Ride, Inc. and
James J. Salter (21)
10.64 Agreement, dated August 2, 1996, by and between Ride, Inc. and
Kenneth J. Finkelstein (21)
10.65 Agreement, dated August 7, 1996, by and between Ride, Inc. and
Robert E. Hall (21)
10.66 Stock Purchase Agreement, dated October 11, 1996, by and
between Ride, Inc. and Gen-X Equipment, Inc. (22)
10.67 Amendment No. 1 to Resignation Agreement, dated October 11,
1996, by and between Ride, Inc. and James J. Salter. (22)
10.68 Amendment No. 1 to Resignation Agreement, dated October 11,
1996, by and between Ride, Inc. and Kenneth J. Finkelstein. (22)
10.69 Resignation and Release Agreement, dated October 28, 1996, by
and between Ride, Inc. and Timothy G. Pogue (23)
10.70 Letter agreement, dated December 6, 1996, by and between Ride,
Inc. and Straight Line Water Sports, Inc. (23)
10.71 Letter agreement, dated December 12, 1996, by and between Ride,
Inc. and Straight Line Water Sports, Inc. (23)
10.72* Financial Advisory Agreement, dated January 15, 1997, by and
between Ride, Inc. and Roger Madison, Jr. (24)
27.1 Financial Data Schedule
</TABLE>
- ----------
(1) Exhibit is incorporated by reference to an identically numbered exhibit
to the Company's Registration Statement on Form SB-2, file no.
33-75770-LA.
(2) Exhibit is incorporated by reference to an identically numbered exhibit
to the Company's Amendment No. 1 to Registration Statement on Form SB-2,
file no. 33-75770-LA.
(3) Exhibit is incorporated by reference to an identically numbered exhibit
to the Company's Registration Statement on Form SB-2, file no.
33-75770-LA, with confidential portions omitted and filed separately
with the Commission pursuant to a Request of Confidential Treatment
under Rule 406 of the Securities Act of 1933.
(4) Exhibit is incorporated by reference to Exhibit No. 10.1 to the
Company's Current Report on Form 8-K, dated August 31, 1994.
(5) Exhibit is incorporated by reference to Exhibit No. 1.1A to the
Company's Amendment No. 1 to Registration Statement on Form SB-2, file
no. 33-75770-LA.
(6) Exhibit is incorporated by reference to an identically numbered exhibit
to the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994.
(7) Exhibit is incorporated by reference to an identically numbered exhibit
to the Company's Post-Effective Amendment No. 1 to the Registration
Statement on Form SB-2, file no. 33-75770-LA.
13
<PAGE> 15
(8) Exhibit is incorporated by reference to an identically numbered exhibit
to the Company's Post-Effective Amendment No. 2 to the Registration
Statement on Form SB-2, file no. 33-75770-LA.
(9) Exhibit is incorporated by reference to an identically numbered exhibit
to the Company's Registration Statement on Form S-1, file no. 33-94814.
(10) Exhibit is incorporated by reference to an identically numbered exhibit
to Amendment No. 1 to the Company's Registration Statement on Form S-1,
file no. 33-94814.
(11) Exhibit is incorporated by reference to an identically numbered exhibit
to Amendment No. 1 to the Company's Registration Statement on Form S-1,
file no. 33-94814, with confidential portions omitted and filed
separately with the Commission pursuant to a Request of Confidential
Treatment under Rule 406 of the Securities Act of 1933.
(12) Exhibit is incorporated by reference to an identically numbered exhibit
to Amendment No. 2 to the Company's Registration Statement on Form S-1,
file no. 33-94814.
(13) Exhibit is incorporated by reference to an identically numbered exhibit
to the Company's Current Report on Form 8-K, dated September 1, 1995.
(14) Exhibit is incorporated by reference to an identically numbered exhibit
to the Company's Current Report on Form 8-K, dated October 20, 1995.
(15) Exhibit is incorporated by reference to Exhibit No. 2.1 to the Company's
Current Report on Form 8-K, dated September 1, 1995.
(16) Exhibit is incorporated by reference to Exhibit No. 2.2 to the Company's
Current Report on Form 8-K, dated October 20, 1995.
(17) Exhibit is incorporated by reference to Exhibit No. 1.1 to the Company's
Registration Statement on Form S-1, file no. 33-94814.
(18) Exhibit is incorporated by reference to an identically numbered exhibit
to the Company's Quarterly Report on Form 10-Q, for the fiscal quarter
ended September 30, 1995.
(19) Exhibit is incorporated by reference to an identically numbered exhibit
to the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995.
(20) Exhibit is incorporated by reference to an identically numbered exhibit
to the Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1996.
(21) Exhibit is incorporated by reference to an identically numbered exhibit
to the Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended June 30, 1996.
(22) Exhibit is incorporated by reference to an identically numbered exhibit
to the Company's Current Report on Form 8-K, dated October 11, 1996.
(23) Exhibit is incorporated by reference to an identically numbered exhibit
to the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996.
(24) Exhibit is incorporated by reference to an identically numbered exhibit
to the Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1997.
14
<PAGE> 16
* Certain portions of this exhibit have been omitted and filed separately
with the Commission pursuant to an Application for Confidential
Treatment.
(b) Reports on Form 8-K
Not applicable.
15
<PAGE> 17
EXHIBIT INDEX
<TABLE>
<CAPTION>
Manual
Exhibit No. Description Page No.
- ---------- ------------- --------
<S> <C>
11.1 Computation of earnings per share
27.1 Financial data schedule
</TABLE>
* Certain portions of this exhibit have been omitted and filed separately
with the Commission pursuant to an Application for Confidential
Treatment.
16
<PAGE> 18
SIGNATURES
In accordance with the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RIDE, INC.
-----------------------------------
(Registrant)
Dated: August 14, 1997 By /s/ ROBERT E. HALL
-----------------------------------
Robert E. Hall
President and Chief Executive
Officer
Dated: August 14, 1997 By /s/ G. SCOTT STEWART
-----------------------------------
G. Scott Stewart
Senior Vice President and Chief
Financial Officer
17
<PAGE> 1
EXHIBIT 11.1
COMPUTATION OF EARNINGS PER SHARE
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
-------------------------- --------------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Primary:
Weighted average common shares outstanding 10,879 10,555 10,826 10,538
Net effect of dilutive stock equivalents
based on the treasury stock method using the
average market price of the common stock -- 667 -- --
---------- ---------- ---------- ----------
Total weighted average shares outstanding 10,879 11,222 10,826 10,538
========== ========== ========== ==========
Net income (loss) $ (2,254) $ 410 $ (4,436) $ (572)
Less dividends on preferred stock (9) (9) (18) (18)
---------- ---------- ---------- ----------
Adjusted net income (loss) $ (2,263) $ 401 $ (4,454) $ (590)
========== ========== ========== ==========
Net income (loss) per share $ (0.21) $ 0.04 $ (0.41) $ (0.06)
========== ========== ========== ==========
Fully diluted:
Weighted average common shares 10,879 10,555 10,826 10,538
outstanding
Net effect of dilutive stock equivalents
based on the treasury stock method using the
the greater of the average market price or the
ending market price of the common stock -- 667 -- --
Assumed conversion of preferred stock -- 200 -- --
---------- ---------- ---------- ----------
Total weighted average shares outstanding 10,879 11,422 10,826 10,538
========== ========== ========== ==========
Net income (loss) $ (2,254) $ 410 $ (4,436) $ (572)
Less dividends on preferred stock (9) -- (18) (18)
---------- ---------- ---------- ----------
Adjusted net income (loss) $ (2,263) $ 410 $ (4,454) $ (590)
========== ========== ========== ==========
Net income (loss) per share $ (0.21) $ 0.04 $ (0.41) $ (0.06)
========== ========== ========== ==========
</TABLE>
18
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 2,742
<SECURITIES> 0
<RECEIVABLES> 6,339
<ALLOWANCES> 592
<INVENTORY> 10,111
<CURRENT-ASSETS> 25,855
<PP&E> 5,923
<DEPRECIATION> (1,647)
<TOTAL-ASSETS> 50,728
<CURRENT-LIABILITIES> 10,211
<BONDS> 0
0
500
<COMMON> 41,347
<OTHER-SE> (2,220)
<TOTAL-LIABILITY-AND-EQUITY> 50,728
<SALES> 7,559
<TOTAL-REVENUES> 7,559
<CGS> 5,567
<TOTAL-COSTS> 5,567
<OTHER-EXPENSES> 8,392
<LOSS-PROVISION> 86
<INTEREST-EXPENSE> (60)
<INCOME-PRETAX> (6,340)
<INCOME-TAX> (1,904)
<INCOME-CONTINUING> (4,436)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,436)
<EPS-PRIMARY> (0.41)
<EPS-DILUTED> (0.41)
</TABLE>
